SB 1219: Small Business Procurement and Contract Act: employment social enterprises.

Existing law, the Small Business Procurement and Contract Act, grants a specified preference for small businesses and microbusinesses in the award of a contract for goods, services, or information technology to the state and in the construction of state facilities. Existing law defines small business and microbusiness for these and other purposes. Existing law permits a state agency and the California State University to award specified types of contracts with a value of between $5,000 and $250,000 to a certified small business, including a microbusiness and a disabled veteran business enterprise, without complying with certain competitive bidding requirements, provided the agency obtains price quotations from 2 or more small businesses, including microbusinesses, or 2 or more disabled veteran business enterprises. Existing law establishes the Office of Small Business and Disabled Veteran Business Enterprise Services and prescribes duties for the office, which include maintaining a bidders list of small businesses and disabled veteran businesses and noting which small businesses also qualify as microbusinesses. Existing law prescribes penalties for a small business or microbusiness that provides incorrect information or withholds information that leads to its incorrect classification as such an entity and is awarded a contract because of that classification. Existing law requires the Department of General Services to make available a report on contracting activity.

This bill would, on and after October 1, 2018, grant an employment social enterprise a preference and status similar to a small business or microbusiness as described above. The bill would define an employment social enterprise as a California-based social purpose corporation, a benefit corporation, or a nonprofit corporation that earns 51% or more of its enterprise revenue from the production or assembly of goods or the provision of services and that demonstrates evidence in its articles of incorporation or bylaws of its mission to provide employment with on-the-job and life skills training to a direct labor force that is comprised of 80% or more of enterprise participants who face multiple barriers to employment. The bill would define an enterprise participant who faces multiple barriers to employment as an individual that meets certain criteria, including that he or she has employment barriers, is or was homeless, or is an out-of-school youth, as specified. The bill would require the above-described report by the department to include information relating to the level of participation of employment social enterprises in state contracting. The bill would require specified documents and facts to be certified under penalty of perjury. By expanding the crime of perjury, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

This bill would incorporate additional changes to Sections 14837 and 14838 of the Government Code proposed by SB 1176 that would become operative if this bill and SB 1176 are enacted and this bill is enacted last. This bill also would incorporate additional changes to Section 10111 of the Public Contract Code proposed by SB 159 that would become operative if this bill and SB 159 are enacted and this bill is enacted last.